Profile picture for walme7

Using equity to meet down payment

I have the opportunity to buy the condo I am renting, from my parents, at a price well below the appraisal.  Can I use this "equity" to meet the down payment ?  I'd like to get an 80-20 mortgage.
  • March 23 2014 - US
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Answers (5)

Best Answer

Yes you can. The most beneficial way for you to do so would be to purchase the condo from your parents and have a gift of equity clause written into the purchase agreement. It would look like this: $100,000 purchase price $20,000 gift of equity $80,000 loan amount The $20,000 never changes hands as the equity is gifted to you. Good Luck!
  • March 23 2014
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You may want to consider the gift of equity at 25% pricing will be better if the value is there.
  • March 25 2014
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Profile picture for walme7
Thank you very much.
  • March 25 2014
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Profile picture for Primary Louisiana
Yes.  if buying from your parents you can do a gift of equity.  Write the sales contract at the grossed up amount and include the terms of gift of equity for the down payment.  Easily doable.  Good Luck!
  • March 23 2014
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Profile picture for walme7
Thank you!
  • March 23 2014
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